Dell Computer Corporation Case

Dell Computer Corporation

Article Review

Dell Computer Corporation is an American computer technology corporation based in Round Rock, Texas. They develop, sell, repair and support computers and related products and services for both enterprise customers and general consumers. Dell has experienced growth, liquidity and profitability in the past by both increasing its customer base and through acquisitions since its inception. The company is well known for its innovations in supply chain management and electronic commerce. Dell keeps a low overhead by implementing a direct-sales model and its “configure to order” approach to manufacturing by delivering consumer PCs that are configured to customer specifications.

A Wall Street Journal article goes into detail about the financial reporting and analysis that Dell reported in its third quarter financial results. Dell’s management team continues to focus on the goals of growth, liquidity and profitability. Stockholders, investors, creditors, and other interested parties rely on the integrity of a company’s financial reports. This report tells the financial state of the company at a given point in time. It helps investors and shareholders to make business decisions that can possibly be of great benefit to the company and to future potential earnings.

Dell still uses a classified balance sheet along with a multistep income statement to publish its financial results to users. In the third quarter of Fiscal Year 2013, the company decreased its revenues by 11 percent ($13.7bn) in the quarter due to revenue losses in desktop PC and smartphone product lines. This revenue target did not reach the predicted target of $14.85bn that was predicted by Wall Street. More importantly, the company’s operating income and net income both decreased by a 48% and 47% respectively in the third quarter of Fiscal Year 2013.

Businesses generally exist with the primary purpose of creating wealth for their owners. Dell's key strategies were implemented with great precision and discipline so that they could make good profits even if they have low margins when compared to the competitors like HP and IBM. Once the world’s top PC maker as well as a pioneer in efficiencies of its supply chain, Dell struggles to defend its market share against Asian rivals which include Acer and Lenovo. Stiff competition also comes from the fast adoption of tablets like the Apple iPad.

A slump in PC sales continues to hurt profits, while revenues in the servers and network division continue to increase 11 percent year over year. Dell hopes to pin its success in the PC market on its favored position as a tablet supplier in the first wave of Windows 8 products that were released in October 2012. Dell has recently announced that it is pulling out of the smartphone market by not making devices that run the Google Android